IT insolvencies increase by nearly a quarter in 2012

Experian figures show that 837 IT firms hit the wall last year, while the overall UK picture brightens

The number of insolvencies across the IT industry rose by nearly a quarter in 2012, according to new figures released by Experian, which claims that of the five largest business sectors in the UK, IT fared by far the worst.

The credit firm's Business Insolvency Index, which was compiled using figures from Companies House, showed that the overall number of insolvent firms across the UK last year dropped by 0.86 per cent to 20,889.

However, the IT industry was not in keeping with the promising figures, with insolvencies rising 21.66 per cent to 837.

In total, 0.74 per cent of all IT businesses in the UK failed; the highest rate in three years.

Of the remaining four largest business sectors in the UK, only the property sector improved its insolvency figures, posting a 15.99 per cent drop in casualties.

Business services and the leisure industry saw a respective 2.53 per cent and 2.52 per cent increase in the number of insolvent firms, while the construction market's figure grew by 0.03 per cent.

The North East had the highest rate of insolvencies in 2012, with the area's figure jumping by 15.88 per cent to 708. The North West region fared the best, with its number of insolvent firms dropping by 7.17 per cent to 2,357.

Max Firth, Experian's UK managing director, said that to be prosperous in 2013, firms must be judicious.

"Firms need to remain prudent in order to prosper. By sharing data with credit reference agencies, businesses can improve their own credit rating, which should also be regularly monitored to ensure businesses are in the best position to secure deals and finance as required," he added.